My Gold Rush—Away From the Metal

Joe Queenan asks: Is there any metal more stupid and annoying than gold?

By

Joe Queenan

Feb. 5, 2015 12:08 pm ET

Last Thursday, gold futures had an electrifyingly bad day, losing 2.4% of their value, their worst performance in more than a year. This was after the Federal Reserve expressed optimism about the economy, indicating that rate increases were still in the offing. Both of these things are bad for gold. All good news is bad for gold. Gold is a lustrous, highly malleable version of the Grinch.

Photo:
Nishant Choksi

Why anyone would be surprised that gold tanked last week is beyond me. Gold is the world’s stupidest and most annoying metal. It has been disappointing people or getting them killed since the dawn of history. Gold is always experiencing stratospheric rises and then collapsing overnight, because it is a metal whose value is entirely based on human emotion.

As opposed to other investments like time shares or collateralized mortgage obligations or Hummel figurines, the value of gold is never linked to sales or revenue or market share or the introduction of exciting new products. It is always linked to bad news. Just as nature abhors a vacuum, gold abhors good times. When gold is rising in value, trouble is a-brewing. Even though it is a shiny and alluring metal, gold is no fun. If you’re looking for fun, get yourself some diamonds.

More Moving Targets

In contrast with other far more sensible metals, like zinc and lead and even gallium, obsession with gold has led to murder and oppression in South Africa and to
Julius Caesar
’s subjugation of ancient Gaul. A popular legend says that when the Parthians captured the Roman consul emeritus Crassus, famed for his cupidity, they poured molten gold down his throat.

Lust for gold led the Spanish Conquistadors to destroy what was perhaps the world’s most beautiful city, Tenochtitlan. Then they shipped the gold stolen from the Aztecs to Spain, where it set in motion seismic economic changes that ultimately led to that country’s ruination and eventual descent into three centuries of general haplessness. The Conquistadors did not find the Seven Cities of Gold; they found Kansas. English explorers did not discover gold in Virginia; they returned with tobacco, which causes lung cancer. But in the long run, gold wouldn’t have been much better.

Gold has been at the heart of many other historical misfortunes. The discovery of gold in the Black Hills of the Dakota Territory in 1874 led to the vanquishing of the mighty Sioux. It also led directly to Custer’s Last Stand. And if there were not gold in them thar hills,
Wild Bill Hickok
would not have been in Deadwood on Aug. 2, 1876, and would not have gotten himself shot in the back of the head. Whenever people start looking for gold, other people end up dead.

Gold has long fascinated mankind because it is considered a safe metal, something to fall back on in times of economic uncertainty. But it is not a safe metal at all; its value gyrates spasmodically according to the vagaries of the market, lurching all over the place. Moreover, gold cannot experience the kind of stupendous growth that shares of Amazon or Apple or
Google
can because gold doesn’t split shares or reinvest profits; it’s one-dimensional. Like I said, gold is stupid.

Recently, I was looking at my own tragic investment portfolio and noticed that I had a small holding of shares in an exchange-traded gold fund. I must have bought these when I was listening to one of those gold bugs on TV—harbingers of doom who are always warning you to have lots of gold salted away for when the black helicopters and the Four Horsemen of the Apocalypse and the Environmental Protection Agency turn up on your doorstep. I am sure that I have never made any money off this moronic substance. Helium is a more intelligent investment than gold. So is jade. Or onyx. Way more intelligent.

If I had a nickel for every time I’ve invested wisely in gold I’d have less than a nickel. And nickels are mostly made of copper.